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The Canadian Competition Bureau is keeping an eagle eye on Jim Balsillie's fight to buy the Phoenix Coyotes, and is ready to swoop in if the Maple Leafs veto the franchise's move to Hamilton.

"We are seized by the matter, and we are monitoring it very closely," Richard Taylor, the deputy commissioner of competition, civil matters, told the Star yesterday.

In Phoenix yesterday, Balsillie and his lawyers continued their lengthy quest to win a bankruptcy auction for the Coyotes in which the National Hockey League itself is the only other bidder. Balsillie has offered $242.5 million (all figures U.S.) for the team, contingent on moving it to Hamilton. The NHL has countered with a $140 million bid with plans to resell the franchise outside of bankruptcy.

The two-day hearing ended without a decision. Judge Redfield T. Baum will render his ruling at a later, unspecified date.

Earlier in the court proceedings, a 2006 letter to the NHL from the Maple Leafs was filed in which the Leafs claimed to have veto power over the arrival of another NHL team in southern Ontario. Balsillie's lawyers' argument that that veto claim is essentially behind the NHL's opposition to the BlackBerry billionaire's bid caught the attention of the competition watchdog.

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"We are concerned," Taylor said. "We are looking at all the paperwork that's coming out of the proceedings and we will take action if we believe that the veto that Toronto thinks they have is exercised and blocks a team. The exercise of the veto that effectively blocked a team from moving would raise concerns for us and would be something we would investigate."

A U.S. sports law professor suggested it was about time Canadian competition officials raised concerns about the possibility of a veto.

"I've learned that the NHL has some bizarre, mystical hold on Canadian government officials," said Stephen Ross of Pennsylvania State University.

"Can you imagine another industry which is of huge importance to Canadians, where Canadian consumers are being denied access to a product that they vigorously demand, all because of an anti-competitive agreement between 30 wealthy owners, 24 of whom are American?"

Taylor would not go so far as to say the Competition Bureau would definitely investigate the Coyotes case.

"We have to be presented with an anti-competitive act, not the possibility of an anti-competitive act," he said.

"We can't go off pre-emptively and stop something that hasn't happened yet just because it may happen, just because the Leafs say they have a veto, and just because many people believe they will exercise it. We have said and continue to say that if a veto is exercised that effectively blocks a team coming into another team's territory, we will look at it and that includes using all our powers to investigate it and determine whether it violates our act."

The Competition Bureau has weighed in on the NHL's business practices in the past. Last year, after it investigated Balsillie's failed bid to buy the Nashville Predators and move them to Hamilton, the bureau issued a statement that declared its confidence that "the NHL's policies are not anti-competitive." Taylor said the investigation concluded that the relocation of an NHL team, according to the NHL's constitution, would require only a majority vote by the league's board of governors.

"The NHL would not permit any single team to exercise a veto to prevent a franchise from entering into Southern Ontario," the statement read.

However, in response to the NHL's assertions that relocation requires a majority vote by the league's board of governors, Maple Leaf Sports and Entertainment sent a letter dated Nov. 29, 2006, to NHL commissioner Gary Bettman claiming that the team holds a de facto veto. That letter was filed by Balsillie's lawyers with the court.

"The Toronto Maple Leafs do not agree that the relocation of a club into their home territory would be subject to a majority vote. They continue to believe a unanimous vote would be required," the letter said. "The Maple Leafs ... reserve all rights to take whatever actions are necessary to protect their exclusive rights to their home territory."

Anecdotal history suggests territorial rights have long been a reality in the NHL. For one, Ron Joyce, the Tim Hortons co-founder who made a failed stab to win an expansion franchise for Hamilton in 1990, has long suggested that the Leafs and Buffalo Sabres blocked his bid at NHL ownership.

Ross said it's not only the spectre of the Leafs suing the league that is behind the NHL's battle with Balsillie – a long line of owners might also appreciate the power of a veto should another entrepreneur set his or her eyes on their territory down the road.

"That is clearly what is going on here. Why do you think the Chicago Blackhawks or Vancouver Canucks owners are trying to prevent a team going to Hamilton, when the Canucks would get way more money from the CBC. CBC's going to be willing to pay a lot more money for Hockey Night in Canada with seven teams rather than six. Why are they willing to throw that money away?" said Ross. "They don't want somebody else moving a team to suburban Chicago or Seattle."

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